Foreign Currency Non Resident (Banks) (FCNR (B)) account is a Fixed Deposit Account in India, that allows an NRI to save money earned overseas in Foreign Currency. FCNR Accounts are an investment option for NRI if they wish to retain their money in foreign currency and earn good returns at the same time. Since FCNR (B) accounts hold in foreign denomination, investor can be saved the risk of exchange rate fluctuations. This also ensures that they earn higher, risk-free returns.
It may be opened only in the form of term deposit for any of the three maturity periods: One year and above but less than two years, Two years and above but less than three years, and Three years only. Interest income is tax free in the hands of NRI until customer maintains a non-resident status or a resident but not ordinarily resident status under the Indian tax laws. FCNR(B) accounts can also be utilised for local disbursements including payment for exports from India, repatriation of funds abroad and for making investments in India, as per foreign investment guidelines.
FCNR account is a Fixed Deposit Foreign Currency account and not a savings account. Most of the banks accepts FCNR (B) deposits in the following currencies: US Dollars, Pounds Sterling, Euro, Japanese Yen, Australian Dollars, and Canadian Dollars.